The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
ELI THACH, :
Plaintiff, :
: CIVIL ACTION
v. : NO. 19-5050
:
STATE FARM FIRE & CASUALTY :
COMPANY, :
Defendant. :
MEMORANDUM
JONES, II J. July 9, 2020
I. BACKGROUND
Eli Thach (“Plaintiff”) initiated this matter against State Farm Fire & Casualty Company
(“Defendant”) on September 30, 2019 by filing a Complaint in the Philadelphia County Court of
Common Pleas. Defendant was served with the Complaint on October 7, 2019, and removed the
case to this Court on October 28, 2019. (Notice of Removal ¶ 3, ECF No. 1.) Presently before
the Court are two motions. Defendant has moved for dismissal of Count II of Plaintiff’s
Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), and Plaintiff has filed a motion
requesting that this matter be remanded to state court. (ECF Nos. 4, 5.) Each party has filed a
response in opposition to the other’s motion. (ECF Nos. 6, 7.)
The pertinent facts as alleged in Plaintiff’s Complaint are as follows: Defendant issued
Plaintiff an insurance policy covering Plaintiff’s property located at 105 Ivy Lane, Zieglerville,
PA 19492 (the “Property”). (Compl. ¶ 3.) On or about January 27, 2019, “Plaintiff suffered
direct physical loss and damage to the insured Property believed to be the result of a peril insured
against” under the insurance policy. (Compl. ¶ 4.) Plaintiff notified Defendant of the loss, but
Defendant “has refused . . . to pay Plaintiff monies owed for the damages suffered as a result of
the [l]oss.” (Compl. ¶¶ 5–6.) Accordingly, Plaintiff alleges that Defendant breached the parties’
insurance contract and acted in bad faith in violation of 42 Pa.C.S.A. § 8371.
II. PLAINTIFF’S MOTION TO REMAND
A. Standard of Review
A defendant may remove to federal court “any civil action brought in a State court of
which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a).
“The district courts shall have original jurisdiction of all civil actions where the matter in
controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is
between . . . citizens of different States.” 28 U.S.C. § 1332(a). “‘The defendant’s right to
remove is to be determined according to the plaintiffs’ pleading at the time of the petition for
removal, and it is the defendant’s burden to show the existence of federal jurisdiction.’”
Hutchinson v. State Farm Fire & Cas. Co., No. 18-cv-2588, 2019 WL 357974, at *2 (E.D. Pa.
Jan. 28, 2019) (quoting Abels v. State Farm Fire & Cas. Co., 770 F.2d 26, 29 (3d Cir. 1985)).
Accordingly, “‘[a] district court’s determination as to the amount in controversy must be based
on the plaintiff’s complaint at the time the petition for removal was filed.’” Hutchinson, 2019
WL 357974, at *2 (quoting Werwinski v. Ford Motor Co., 286 F.3d 661, 666 (3d Cir. 2002)). “If
the district court determines that it lacks subject matter jurisdiction, remand is mandatory.”
Hatchigian v. AAA Mid-Atl. Member Relations, No. 19-4740, 2020 WL 2745742, at *2 (E.D. Pa.
May 27, 2020) (citing 28 U.S.C. § 1447(c)).
B. Discussion
Plaintiff seeks remand of this matter to the Philadelphia County Court of Common Pleas
on the grounds that this Court lacks subject matter jurisdiction to hear the dispute. Specifically,
Plaintiff argues that “Defendant cannot clearly demonstrate that the amount of controversy [sic]
exceeds $75,000.00, as required by 28 U.S.C. § 1332(a).” Mot. Remand ¶ 6. Accordingly, only
the amount in controversy is at issue for purposes of Plaintiff’s Motion.
Congress enacted the Federal Courts Jurisdiction and Venue Clarification Act in 2011.
Pub.L. 112–63, 125 Stat. 758 (Dec. 7, 2011). “There Congress clarified the procedure and
standard for determining if the amount in controversy requirement has been met when an action
is removed from the state court.” Karlberg v. Santander Bank, N.A., No. 17-3561, 2017 WL
4810800, at *3 (E.D. Pa. Oct. 25, 2017). The statute provides, in pertinent part, as follows:
(2) If removal of a civil action is sought on the basis of the jurisdiction
conferred by section 1332(a), the sum demanded in good faith in the
initial pleading shall be deemed to be the amount in controversy,
except that—
(A) the notice of removal may assert the amount in controversy
if the initial pleading seeks—
(i) nonmonetary relief; or
(ii) a money judgment, but the State practice either does
not permit demand for a specific sum or permits
recovery of damages in excess of the amount
demanded; and
(B) removal of the action is proper on the basis of an amount in
controversy asserted under subparagraph (A) if the district
court finds, by a preponderance of the evidence, that the
amount in controversy exceeds the amount specified in
section 1332(a).
28 U.S.C. § 1446(c).
In Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 87 (2014), the
Supreme Court discussed the operation of the statute: “[W]hen a defendant seeks federal-court
adjudication, the defendant’s amount-in-controversy allegation should be accepted when not
contested by the plaintiff or questioned by the court.” But if “the plaintiff contests the
defendant’s allegation, § 1446(c)(2)(B) instructs: ‘[R]emoval . . . is proper on the basis of an
amount in controversy asserted’ by the defendant ‘if the district court finds, by the
preponderance of the evidence, that the amount in controversy exceeds’ the jurisdictional
threshold.” Dart, 574 U.S. at 88 (alterations in original); see also Evans v. Zhang, No. 17-3801,
2017 WL 4547912, at *1 (E.D. Pa. Oct. 12, 2017) (“Because Pennsylvania does not allow a
demand for a specific sum of money where damages are not liquidated, see Pa. R. Civ. P.
1021(b), the removing defendant must show, by a preponderance of the evidence, that the
amount in controversy exceeds $75,000.00.”) (citing 28 U.S.C. § 1446(c)(2); Frederico v. Home
Depot, 507 F.3d 188, 193 (3d Cir. 2007)). “Preponderance of the evidence means proof to a
reasonable probability that jurisdiction exists.” Hatchigian, 2020 WL 2745742, at *4 (internal
quotation marks omitted). “While [d]efendants are not obligated to research, state, and prove
[plaintiffs’] claims for damages, they must present facts sufficient to establish that [a plaintiff]
would more likely than not recover more than the jurisdictional amount.” Id.
“‘When both actual and punitive damages are recoverable, punitive damages are properly
considered in determining whether the jurisdictional amount has been satisfied.’” Minissale v.
State Farm Fire & Cas. Co., 988 F. Supp. 2d 472, 476 (E.D. Pa. 2013) (quoting Packard v.
Provident Nat. Bank, 994 F.2d 1039, 1046 (3d Cir. 1993)). “‘Moreover, in calculating the
amount in controversy, we must consider potential attorney’s fees.’” Id. (quoting Suber v.
Chrysler Corp., 104 F.3d 578, 585 (3d Cir. 1997)).
Here, Plaintiff’s Complaint alleges two causes of action: (1) breach of contract and (2)
statutory bad faith under 42 Pa.C.S.A. § 8371. (Compl. ¶¶ 8–16.) As Defendant points out in its
Response to Plaintiff’s Motion, Plaintiff attached as an exhibit to his Complaint estimates setting
forth the cost to repair the alleged damage to his property “that total $65,201.94.” Def.’s Br. at 5
(ECF No. 7-2); see also ECF No. 5 at 27–31. In addition, Plaintiff seeks punitive damages and
attorneys’ fees in connection with his statutory bad faith claim. (Compl. ¶ 16.) See also
Minissale, 988 F. Supp. 2d at 476 (“It is undisputed that punitive damages and attorneys’ fees are
available under 42 Pa. Cons. Stat. Ann. § 8371 and there is no cap on the amount that can be
recovered.”); Neri v. State Farm Fire & Cas. Co., No. 19-0355, 2019 WL 3821538, at *3 (E.D.
Pa. Aug. 13, 2019) (“Indeed, it is common in cases involving a claim of bad faith under 42 Pa.
Cons. Stat. Ann. § 8371 for courts to include in calculations of the amount in controversy any
potential punitive damages and attorney’s fees available under the statute.”). Defendant argues
that if Plaintiff were to prevail on those claims, the available damages would certainly exceed the
jurisdictional threshold. See Def.’s Br. at 9 (“Considering compensatory damages in excess of
$65,000, and the availability of punitive damages for the claimed bad faith, . . . even a very low
1-1 ratio of punitive damages to compensatory damages would result in an award in excess of
$130,000.”); (“Attorney’s fees must also be included in determining the amount in
controversy. . . . It would not be unreasonable to expect that over the course of an approximate
nine-month litigation of this nature, counsel could incur costs and fees in an amount approaching
$35,000.”).
Plaintiff argues that “a [m]otion to [r]emand must be granted where a [p]laintiff properly
limits the amount of damages in the ad damnum clauses to below the $75,000 jurisdictional
threshold, and the [d]efendant fails to show to a legal certainty that the amount in controversy
exceeds $75,000.00.” Mot. Remand ¶ 8. But in each of the cases Plaintiff cites in support—and
unlike here—the complaint identified the amount in controversy as under $50,000 specifically to
establish that the case qualified for the state court’s compulsory arbitration program. See Lewis-
Hatton v. Wal-Mart Stores East, LP, No. 13-7619, 2014 WL 502367, at *1 (E.D. Pa. Feb. 7,
2014) (“Plaintiff filed the action in the court’s arbitration program, checked the box indicating
that the amount in controversy was $50,000 or less, and demanded damages in an amount not in
excess of fifty thousand dollars ($50,000), together with costs according to the law.”) (internal
quotation marks omitted); Hodges v. Walgreens, No. 12-1162, 2012 WL 1439080, at *1 (E.D.
Pa. Apr. 26, 2012) (“The Complaint included an ad damnum clause requesting judgment in an
amount not in excess of $50,000.”); Coates v. Nationwide Ins. Co., No. 12-4031, 2012 WL
4068437, at *1 (E.D. Pa. Sept. 14, 2012) (“Plaintiff’s Complaint filed in the Court of Common
Pleas contained a cover sheet on which Plaintiff checked a box indicating that the amount in
controversy was ‘$50,000 or less.’ The case was designated for compulsory arbitration where the
total amount of damages recoverable is capped at $50,000.”). That distinction is of critical
importance because, as the court explained in Hodges, “ad damnum clauses are generally not
permitted for unliquidated claims under Pennsylvania law,” but “there is an exception for
complaints filed in counties, such as Philadelphia County, that provide for compulsory
arbitration for claims expressly limiting damages to under $50,000.” 2012 WL 1439080, at *3.
Plaintiff’s Complaint in this case specifically indicated that the amount in controversy was more
than $50,000, and therefore that the case was not subject to compulsory arbitration. See Compl.
Civil Cover Sheet (ECF No. 5 at 11). Accordingly, the restriction on ad damnum clauses applied
to Plaintiff’s Complaint, and Plaintiff’s attempt to artificially cap the amount in controversy “as
less than $75,000.00” through an ad damnum clause is inconsistent with Pennsylvania’s pleading
rules. See Pa. R. Civ. P. 1021(b); Compl. ¶ 7.
Moreover, in the cases cited by Plaintiff, the parties seeking to invoke federal jurisdiction
failed to provide any factual basis establishing the amount in controversy. See Hodges, 2012
WL 1439080, at *4 (“Defendants have offered no support for their position that [the plaintiff’s]
injuries exceed $75,000”); Lewis-Hatton, 2014 WL 502367, at *4 (“[t]here is no colorable
dispute regarding any underlying jurisdictional facts because neither Plaintiff nor Defendant has
provided any specific information regarding the damages allegedly incurred”). Here—by
contrast, and as stated above—Plaintiff himself provided specific information estimating that his
alleged damages “total $65,201.94.” Def.’s Br. at 5; see also ECF No. 5 at 27–31. “Courts have
found that the amount in controversy exceeds the $75,000 threshold where a plaintiff is able to
recover a specified amount of damages, plus punitive damages and attorney’s fees under” 42
Pa.C.S.A. § 8371. Hutchinson, 2019 WL 357974, at *2.
In Hutchinson, the court reviewed and relied on several such cases in conducting its
analysis, and those examples are instructive here:
[A] plaintiff stated a claim for more than $75,000 by alleging $53,315 in actual
damages under the breach of contract claim and a bad faith claim seeking damages
“in excess of $50,000 together with interest and costs.” Minissale, 988 F. Supp. 2d
at 477. By way of further example, the amount in controversy exceeded $75,000
where the plaintiff alleged “$28,682.41 in individual compensatory damages in the
form of unpaid insurance benefits” and sought “individual punitive damages under
Pennsylvania’s bad faith insurance statute.” Papurello v. State Farm Fire & Cas.
Co., 144 F. Supp. 3d 746, 753 (W.D. Pa. 2015). Plaintiffs’ case is analogous to
these cases because Plaintiffs pled a certain amount of actual damages pursuant to
a breach of contract claim (i.e., $24,711.11) and punitive damages under
Pennsylvania’s Bad Faith Insurance Statute.
2019 WL 357974, at *2. The likelihood that the amount in controversy surpasses $75,000 in this
case is even stronger than in the cases discussed above, as Plaintiff’s claimed compensatory
damages here amount to more than $65,000—before punitive damages and attorneys’ fees are
taken into account. And as Defendant correctly notes, even a punitive-to-compensatory damages
ratio of 1-to-1 would place the amount in controversy well over the statutory threshold. When
taking the foregoing into account, in addition to Plaintiff’s ability to also potentially recover
attorneys’ fees, Defendant has clearly shown, by a preponderance of the evidence, that the
amount in controversy requirement for purposes of diversity jurisdiction is satisfied in this case.
See also Neri, 2019 WL 3821538, at *3 (“Thus, the Court concludes that considering the
damages sought in the Complaint as well as the uncapped punitive damages and attorney’s fees
sought under the Pennsylvania Bad Faith Statute, the amount in controversy in this case is at
least $75,000 and the Court may properly exercise diversity jurisdiction.”). Accordingly,
Plaintiff’s Motion to Remand this matter to the Philadelphia County Court of Common Pleas is
denied.
III. DEFENDANT’S MOTION TO DISMISS
Defendant has filed a Motion seeking dismissal of Plaintiff’s claim under Pennsylvania’s
Bad Faith Insurance Statute (Count II of Plaintiff’s Complaint). Defendant argues that Plaintiff’s
Complaint fails to state a claim for statutory bad faith, as “Count II fails to set forth a single fact
to support its claim of bad faith but instead relies on boilerplate allegations which are generic to
any claim of bad faith.” Mot. Dismiss ¶ 11. This Court agrees. The allegations in Plaintiff’s
Complaint purporting to state a claim for bad faith are in fact identical to the allegations from a
prior complaint filed by Plaintiff’s counsel in another case, which this Court found to be
insufficient to state a claim in a Memorandum Opinion dated March 19, 2020. See Clapps v.
State Farm Ins. Cos., No. 19-3745, 2020 WL 1308230, at *3–5 (E.D. Pa. Mar. 19, 2020) (“In
short, Count II of Plaintiff’s Complaint contains nothing more than ‘bare-bones conclusory
allegations that do not provide a factual basis for an award of bad faith damages.’”) (quoting
Mozzo v. Progressive Ins. Co., No. 14-5752, 2015 WL 56740, at *2 (E.D. Pa. Jan. 5, 2015))
(alteration omitted). Plaintiff’s Response in Opposition to Defendant’s Motion here provides no
further argument or analysis calling into question the Court’s ruling in that case. Accordingly,
Defendant’s Motion is granted, and Count II of Plaintiff’s Complaint is dismissed for the same
reasons set forth in Clapps, 2020 WL 1308230, at *3–5. However, as in Clapps, Plaintiff is
granted leave to file an amended complaint to replead the statutory bad faith claim.
IV. CONCLUSION
For the foregoing reasons, Plaintiff’s Motion to Remand this matter to the Philadelphia
County Court of Common Pleas is denied, Defendant’s Motion to Dismiss Count II of Plaintiff’s
Complaint is granted, and Plaintiff is granted leave to amend the claim set forth in Count II.
An appropriate Order follows.
BY THE COURT:
/s/ C. Darnell Jones, II
C. Darnell Jones, II J.